Walsh Company is considering three independent projects, each of which requires a $5 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented below: Project H (High risk): Cost of capital = 17% IRR = 19% Project M (Medium risk): Cost of capital = 14% IRR = 13% Project L (Low risk): Cost of capital = 8% IRR = 11% Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 35% debt and 65% common equity, and it expects to have net income of $12,852,500. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places. % Check My Work Reset Problem Each project's investment cost $5,000,000 Cost of capital - Cost of capital 3.00% IRRM-IRRL 2.00% Project Cost of Capital Internal Rate of Return H (High Risk) 17.00% 19.00% M (Medium Risk) 14.00% 13.00% 8.00% 11.00% L (Low Risk) Firm's Capital Structure Weights: % debt in capital structure, Wd 35.00% % common equity in capital structure, Wc 65.00% Net income $12,852,500 Calculation of Capital Budget: Project H (High Risk) M (Medium Risk) L (Low Risk) Total Capital Budget Include in Budget (Y/N) Investment Cost Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A Calculation of Capital Budget Financed with Common Equity: Formulas Common equity required #N/A Calculation of Common Dividends Using Residual Model: Common dividends #N/A Calculation of Dividend Payout Ratio: Dividend payout ratio #N/A